The interest calculation and posting can be carried out in two ways:
- Individually for one contract account.
- Mass run for a range of contract accounts.
The interest run should always be planned and executed in agreement with the payment- and dunning run.
Interest in contract accounting is not only calculated and posted during specific interest applications such as Post Interest and Interest Run but also during other processes of the open item management such as dunning, invoicing and installment plan creation.
Interest on open debit items is calculated for the period from the due date to the interest calculation date (this is usually the current date).
Interest on cleared debit items is calculated for the period from the due date to the date of clearing, provided the clearing falls before the interest calculation date. If an item isn't cleared by a payment (for example, a reversal), no interest calculation is to take place.
Interest on debit items can be posted as a statistical or real item.
Interest on credit items always have to be posted as a real item.
Interest simulation means that interest is calculated for information only and not posted.
The interest posting creates an interest document, which contains an interest supplement.
The interest supplement contains the items for which interest was calculated, as well as the relevant amounts, intervals, and the interest key. This allows you to identify which factors were used for interest calculation and posting.
The interest key can be assigned to the contract account but can also be stored in the dunning level (if it was calculated in the dunning run) or entered in the relevant item (manually or automatically) which has the highest priority.
The interest key consists of all control parameters for interest calculation and posting:
- Parameters for item selection.
- Reference to a calculation rule.
- Period Control (The baseline date for interest calculation is Due Date + Grace Period + Transfer Days):
- The tolerance days (grace period) is the minimum number of days that must have passed since the due date for net payment of a receivable before interest can be calculated. If the receivable is cleared within the tolerance period, no interest calculation or interest posting can take place. The tolerance period isn't taken into account for interest calculations in the future (such as installment plan interest).
- The calculation frequency determines the earliest point at which interest is calculated for an item if interest has already been calculated.
- The transfer days refer to the period that it takes a bank to clear a payment and provide the clearing information. This ensures that interest calculation doesn't take place on a receivable for which payment is delayed by the bank.